Through its mobile app promotion platform, Appwiz seeks to do for mobile apps what Google Adwords did for websites

A Q&A with Appwiz founder and CEO Yariv Ron. The Tel Aviv-based startup, which has built a mobile app promotion and monetization platform for mobile web publishers, last week announced the closing of a $1.4 million funding round from Magma Venture Partners and undisclosed private investors. The company was founded in 2012 by Ron and Gil David, and this is its first round of outside funding.

The digital age is marked by a massive shift in traffic from desktop to mobile devices. However, the rules in the mobile universe are different, and it is proving difficult for publishers and developers to generate substantial revenue in this rapidly growing ecosystem, which has a unique challenge.

On one side, publishers have difficulty monetizing their mobile web traffic—close to 30 percent of web publisher traffic is accessed through mobile devices, but this traffic generates only a small percentage of total revenue.

Time on mobile is spent in apps—over 80 percent of the time people spend on their mobile devices is spent using apps. This is where the advertising spend is, creating a $25 billion industry. The challenge, and opportunity, that we are addressing is to find a way to bridge this monetization gap by bringing the world of apps to the mobile web.

SUB: Who are your target markets and users?

Ron: At this stage, our primary targets are web publishers, who we approach and offer this unique ad unit that brings the distribution of apps to the mobile web, providing visitors to mobile web sites ‘Apps they may like’ in a consumer-friendly manner.

SUB: Who do you consider to be your competition, and what differentiates Appwiz from the competition?

Ron: There are a number of PPC distribution platforms that are focused solely on the content space, such as Outbrain and Taboola. However, these platforms are focused on content recommendations and have not entered the app ecosystem as of yet. The Appwiz ad unit is complementary to these content distribution platforms.

In addition, there are a number of smaller companies that are currently entering the field of app distribution on the mobile web. However, at this stage there are no market leaders.

SUB: You just announced that you’ve raised $1.4 million in new funding. Why was this a particularly good time to raise funding?

Ron: We raised the funds a few months ago in order to be able to complete the development of the first stage of this offering, and enable us to begin initial sales efforts.

SUB: How do you plan to use the funds, and do you have plans to seek additional outside funding in the near future?

Ron: The funds will be used to continue development of the offering, with additional ad units and a self-serve PPC platform for the application developers to use to distribute the apps on the Appwiz network of publishers, as well as to rollout our sales team in New York City.

We will be seeking additional funding in the future for international growth.

SUB: What was the inspiration behind the idea for Appwiz? Was there an ‘aha’ moment, or was the idea more gradual in developing?

Ron: Actually, it was part of a gradual process over the course of the past year. Appwiz was founded with an initial goal of providing tools to assist in monetization of apps, and while we were developing and working with app developers, we realized that there was a huge challenge in distributing the apps, and it was very hard for the vast majority of app developers to get significant distribution for their apps in a targeted, relevant, and cost-effective manner.

And this was our ‘aha’ moment, where we said: “Let’s do for apps what Google did for websites, what Outbrain did for content,” and we put together this offering, which internally we refer to as “Appwords and Appsense.”

SUB: What were the first steps you took in establishing the company?

Ron: My co-founder and partner, Gil David, and I have extensive experience in putting together and running companies—this is my fourth company, and Gil’s third. So, when we decided to try to enter the mobile arena in some manner, we identified our initial product goals, knowing that most likely this would change over time, and just got to work with two developers.

SUB: How did you come up with the name? What is the story or meaning behind it?

Ron: One of our initial pre-Seed investors came up with the name; we just wanted something with the word ‘app’ in it.

SUB: What have the most significant challenges been so far to building the company?

Ron: The biggest challenge, always, is recruiting the right people. At this stage of a company’s lifecycle, each-and-every person has a tremendous influence on all aspects of the company—both on the professional and personal level. So we do our best to put as much time and effort as is possible to find the right people to join.

SUB: How do you generate revenue or plan to generate revenue?

Ron: Our platform will be a PPC platform, and we will work in the same model as all such platforms, where we split the revenue generated by clicks with the publisher.

SUB: What are your goals for Appwiz over the next year or so?

Ron: Other than continuing the development of the product and offering, our main challenge is sales, and opening our U.S. sales team in New York City is a tremendous undertaking which we are starting these days.